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How to Pay for College Without Breaking Your Budget

With college costs continuing to climb, it's harder than ever for parents to solve the problem of how to pay for college without sacrificing their own financial security. But with the right strategies, you can make the most of the resources at your disposal and improve your chances of helping your kids avoid crippling student loans while still staying solvent yourself.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at three things to consider about how to pay for college. Dan notes that using 529 plans are a great way to use tax-free benefits to help invest money toward college expenses. He discusses findings from Morningstar that name Vanguard, T. Rowe Price (NASDAQ: TROW) , and BlackRock (NYSE: BLK) as solid 529-plan managers, while a 529 plan distributed by Schwab (NYSE: SCHW) got less attractive marks from Morningstar.

Dan also suggests several steps to consider in order to try to increase financial aid and reduce your parental contribution toward your child's education. Finally, Dan notes the many opportunities for other cost-cutting moves, ranging from fellowships and scholarships to seeking out more cost-effective schools.

Invest for college and beyondIn deciding how to pay for college, investing is a key part of a successful strategy. But millions have been too scared to invest in recent years, even though staying out of the market has endangered their financial futures. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

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Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.
Follow @DanCaplinger